If you are considering foreclosure as an option for your current home, please take a look at these new guidelines put out by Fannie Mae for future mortgage loans. If you are having trouble making your payment right now, please talk to an attorney, a mortgage professional or a debt counselor prior to making any decisions. What you do today will affect your credit for many years to come. There are a lot of options out there and one of them may just be able to help you out of your current situation. You should talk to as many trusted professionals as possible, get references from friends and family, another professional you have used or trusted in the past or someone with excellent references from your current banking institution.

FNMA Changes

In light of current market conditions and the associated risk, FNMA has added conditions to loans for
borrowers that have experienced a bankruptcy, foreclosure or effected a Deed in Lieu of foreclosure.
They have additionally made changes to the qualifying conditions for borrowers intending to convert their
current primary residence to a Second home or investment property.

Changes are effective with loan applications dated on or after August 1, 2008

Bankruptcy/Foreclosure
• Chapter 13 bankruptcy cases that were not completed successfully will be held to a four (4) year time
period for re-establishing credit. Unsuccessful completion will be indicated by a dismissal date on the
credit report rather than a discharge date.
• For foreclosures with at least five (5) but no more than 7 years since completion, the following
conditions apply:
- Purchase
- Primary residence only
- Min 680 credit score
- Min 10% downpayment

- Refinance
- Cash out not permitted

Deed-in-Lieu of Foreclosure/ Short Sale

Borrowers that have completed a Deed in Lieu or short sale of foreclosure must have an elapsed time of
4 years since completion date.
Pre-foreclosure sale requires a 2 year time period from completion date. There are no exceptions for
extenuating circumstances.

Conversion of Principal residence to Second Home or Investment Property
• Conversion to a Second Home:
- Borrower must be qualified with both payments
- For LTV's >70%, 6 months PITI reserves for both properties is required.
- For LTV's < 70%, 2 months PITI reserves for both properties is required.

• Conversion to an Investment Property:
- For properties with an LTV < 70%, borrowers may use up to 75% of rental income for qualification.
Borrower must provide a fully executed lease and receipt of security deposit and evidence of
deposit into borrower's account.
- For properties with an LTV > 70%, borrowers may not use rental income to qualify, and 6 month
PITI reserves is required for both properties.

Thank you and please feel free to call me with any questions you may have!

Susan Wallace
Carteret Mortgage
571-283-1337
Susan@Susan-W.com

Thank you So much For Sharing such a wonderful Stuff With us

I found a short sale site that states they work with the investors, Fannie and Freddie and servicers. Apparently there are no costs to the seller or buyer. They are at www.nationalquicksale.com

Sammie, thanks for sending this. I do have to put a caveat in that we don't endorse any specific company on these sorts of issues nor can we verify their reputation. We think it makes sense to check out any reasonable option, but please do due diligence!

Joe Gladden